On Friday 19 July Portugal’s National Assembly definitively adopted a series of amendments to the country’s Labor Code. While social collaboration initiated the reform process and several discussion stages followed, the resulting agreement has fallen short of securing the signature the major Communist Party leaning CGTP union. While the reform does not wholly revise the former Labor Code that was adopted in 2012 during the throes of the austerity period and as required as part of the international ‘Troika’ economic bailout plan (UE/IMF/ECB from 2011-2014), it does revisit some of the 2012 modifications and especially those treating fixed-term employment relationships, and represents an attempt to tackle employment uncertainty, with the noteworthy introduction of additional contributions to be paid by companies making ‘excessive’ recourse to this form of employment.
Principal Labor Code reform measures:
- Excessive Rotation Tax introduced: from 2021 companies making excessive use of fixed-term employment relationships will be subject to payment of an additional tax (paid to the social security authorities). It will be due if the rate of use of this type of contract is higher than the sector relevant indices that will be published during the first quarter of every year (from 2020). This will be a progressive tax, the maximum amount of which will be 2% of fixe
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